NSE Nifty 50 may trade within 17250-18000 range in this week’s futures and options contracts expiry, on the back of mixed global sentiment and other domestic events, such as Q4 earnings, macroeconomic data release (CPI and IIP numbers), Ajit Mishra, VP – Research, Religare Broking, said. In the previous weekly expiry, Nifty was unable to sustain above the 18000 mark, and settled at 17,639, reversing the gains made in Monday’s session. As suggested by the weekly options data, Bank Nifty may stay in a broad range of 36000-38000 levels this week.
Nifty has been witnessing some profit taking after testing the resistance zone of 18,150 levels. Indications are in the favour of some consolidation before the next directional move, Ajit Mishra, VP – Research, Religare Broking, told FinancialExpress.com. “Keeping in mind the mixed global sentiment and upcoming domestic events, we expect the range could be broader and expect to hover within 17,250-18,000 levels. Within that range, any dip around the 17,400 zone would offer an opportunity to create positional longs in the index as the bias is still on the positive side,” Mishra said.
Bank Nifty is also trading in sync with Nifty and seeing a dip after the recent surge. Mishra said that the swings in the banking index are comparatively sharper and we expect some stability in the coming week. On the downside, the 36,200-36,700 zone would provide a cushion in case the profit taking extends. “The upside also seems capped to the 38,200-39,000 range. In line with the Nifty, traders should continue with the “buy on dips” approach and utilise a dip around 36,700 to create fresh longs,” he added.
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services said that the weekly options data suggests that the markets are showing a highly defensive approach. The strikes of 17800, 17900 and 18000 are witnessing very active call writing happening since morning. “As of now, for the Wednesday expiry, the strike of 18000 holds a maximum Call OI of 5.5 million shares followed by 5.4 million shares at 17800. This means that the levels of 17800 will be a formidable resistance for the Nifty to cross; if it crosses it, 18000 will be the next level. On the lower side, 17500 holds maximum PUT OI; any violation of this level will invite incremental weakness in Nifty,” Vaishnav told FinancialExpress.com.
For Bank Nifty, the weekly options data shows that the index is likely to stay in a broad range of 36000-38000 levels. If we narrow down the figures, then the strikes of 37500 is seeing heavy PUT writing going on; this means that market participants do not expect Bank Nifty to slip below this level, Vaishnav said. “On the higher side, 38000 is seeing high call writing; this level also holds maximum Call OI accumulation. This means that 38000 would be the resistance for Bank Nifty as of now as indicated by the weekly options data,” he added.
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